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Debt consolidation versus bankruptcy: Which is better?

Dealing with more debt that one can manage can be an overwhelming and stressful problem. A Pennsylvania consumer may be facing things like harassment from creditors, threats of wage garnishment and other consequences that affect things beyond his or her financial health. In some cases, debt consolidation could be an optimal choice. Others may find bankruptcy to be more appropriate for their individual situation.

Debt consolidation is a personal loan that consolidates various types of balances into one payment. It reduces the overall number of payments, allowing the consumer to focus on one bill instead of many. It may also come with an interest rate that is lower than credit cards and other types of unsecured debt. Consolidation gives an applicant a plan and a set date that he or she will pay off the balance, something that could be helpful for the individual.

For some, consolidation will make sense, but there are times when a more significant step is necessary. Bankruptcy can allow a consumer to discharge certain types of debt while protected from debt collectors. There are benefits and drawbacks to both options, and a consumer may want to consider both before moving forward.

It is beneficial to speak with an experienced Pennsylvania attorney regarding the individual financial situation. An assessment of the individual case will reveal if debt consolidation or bankruptcy is the prudent way forward. Legal guidance can ensure that a consumer makes choices that are in his or her interests, leading to a more stable and secure financial future.

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